Gender pay gap: UK women bosses earn 35% less than male colleagues

Women bosses are still earning only three-quarters as much as their male colleagues, meaning they would have to work until they were nearly 80 to catch up with men’s lifetime earnings, according to new figures .

More than 40 years after the Equal Pay Act outlawed less favourable pay and conditions in the workplace, the data shows that discrepancies in salaries widen at the higher echelons of management, with a “midlife pay crisis” particularly hitting female managers aged over 40, who earn 35% less than men.

The average pay gap between men and women aged between 46 and 60 stands at £16,680 a year, while among company directors men take home £21,084 more than their female colleagues.

Ann Francke, chief executive of the Chartered Management Institute (CMI), said: “This is all about apathy and ignorance. Companies think it is not a problem for them, so they don’t do anything about it. Every company needs to conduct its own survey. It is pretty obvious a lot of the FTSE 350 are [paying their women managers less than men] for the data to turn out like this. There are very few good guys.”

Francke said that the likes of the supermarket chain Tesco, which publishes data on its gender pay gap, and the law firm Linklaters, which reveals the percentages of women it employs at different levels, were rare examples of organisations attempting to address the problem. Tesco says its pay gap stands at 1% compared with the national average of 10%, although those figures apply to the whole workforce.

The National Management Salary Survey, published annually by the CMI and employment lawyers XpertHR, covers more than 68,000 British professionals and compares data on people at similar levels of management within the workplace.

Including men and women managers of all ages, the CMI said that the pay gap stands at £9,069, with men getting an average salary of £39,461 where women get £30,392.

“This means women are earning only three-quarters (77%) of what men in full-time comparable jobs earn,” the CMI said. “Yet the gap is far worse for women aged 40-plus, where the problem is twofold. Not only does the salary gap increase with age and seniority, but there is also a persistent “bonus pay gap”. The average bonus for a female director stands at £41,956, while for male directors the average payout is £53,010.”

The 1970 Equal Pay Act was memorably triggered bythe 1968 Ford sewing machinists’ strike, which resulted in the workers being summoned to Whitehall by the then employment secretary, Barbara Castle, who brokered a deal. Although the legislation has now been repealed, its provisions are essentially contained within the 2010Equality Act.

Few cases over equal pay have ever been brought to court, although two years ago the Supreme Court did allow 174 mainly female former Birmingham city council workers to press ahead with compensation claims over missed bonuses – a judgement that has cost the council around £1bn to settle equal pay claims.

Helen Pitcher, chairwoman of the human resources consultancy Advanced Boardroom Excellence, said it was unlikely many women bosses would want to take legal action.

“I am not surprised by the findings at all – and that is no criticism of the report at all,” she said. “I wrote my thesis on women in management in the 1980s and very little has changed. The solution is all about transparency. Women often struggle with asking for a pay rise, whereas men don’t. I don’t think that most women would want to go as far [as taking legal action]. Very few women want to stick their heads above the parapet on this stuff.”

The CMI pay data also shows that under the age of 19, female managers are paid 12% less than males, while between the ages of 20 and 25 the figure falls to 6%, before rising again to 8% between 26 and 35. At that point, male managers start earning significantly more than female colleagues in similar jobs.

Nicky Morgan, the minister for women and equalities, said: “Although the gender pay gap remains too high, it is narrowing, and for full-time workers under 40 is almost zero. In 2012, 20% of small and medium-sized businesses were either run solely or mostly by women. I’m pleased that every FTSE 100 board now includes a woman and more businesses are recognising the skills and experience that diversity brings to a workplace.”

Meanwhile, a study earlier this year by US management consultancy Bain & Co found that more women than men start corporate life aiming for the top positions, but that their ambition and confidence is swiftly eroded.

The report said: “Many might assume this drop-off occurs as women get married and have children; however, our analysis suggests that marital and parental status do not significantly differ for women who aspire and women who don’t. The picture improves only slightly for more senior female employees. This detailed and segmented trend analysis runs counter to previous, more general research showing that women have aspirations equal to men’s”.

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